Specialist re/insurance broker Miller had previously explained that differentiation had become more achievable which remained the case through the 20th February P&I reinsurance renewals, particularly for accounts that have shown better performance and long-term profitability for the market.
Since the beginning of 2021, the increases sought by leaders in the general marine liability market, pushed hard by the followers, have been in the region of 12.5 – 15%.
With the emergence of differing views amongst underwriters, Miller is reporting that the minimum level of rise is beginning to fall and, dependent upon a number of factors, even single figure rises for some accounts being achieved.
Accounts that suffered significant losses, however, were subject to restructuring and/or substantial increases, as the market pushed for more sustainable rating.
Notwithstanding the possible differentiation, underwriters continued in their requirement for real rate rises across the board, with reductions still not possible.
It became clear through the renewal season that reinsurers are not completely aligned in their view of where the marine liability class currently is within the insurance cycle and therefore, whether further pricing correction is required.
The broker reported that pockets of softer market attitudes were appearing and with new capacity in the market, those underwriters holding out for better terms were no longer successful.
The industry is currently in a transitional phase, where the majority of markets are comfortable with the current or even lower level of rate rise, whilst a small number of markets believe pricing levels need to increase further.
It is important to note that whilst there is a slight easing of pricing pressure on some accounts or layers, the excess, high-capacity stretches that allows Miller’s clients to offer the highest limits available in the market still require a significant number of supporters.
It is therefore no surprise that coupled with underwriters’ continued concern around increased claim severity and inflation, these placements are still attracting rises at the higher end of the spectrum.
In recent years, the market has been increasingly unified in its messaging that reinsureds should be taking larger retentions.
This thinking has been borne from a belief that the increasing frequency of losses, and inflation, means that primary levels of programmes are more exposed to attritional losses and by increasing the amount retained by reinsureds will lead to increased focus on risk selection and original rating.
To persuade reinsureds to increase their retentions, the market has been willing to give relative value in premium saving and whilst each programme is different, Miller expects this to continue moving forwards.